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TMI Blog2019 (1) TMI 1555X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions were considered by the Mumbai Bench of the Tribunal in the case of Future Corporate Resources Ltd v. ACIT [ 2017 (9) TMI 805 - ITAT MUMBAI] relating to AY 2011-12 and it was held by the Tribunal Mumbai Bench that disallowance u/s. 14A of the Act cannot exceed the exempt income. Following the aforesaid decisions, we hold that disallowance u/s. 14A in the present case should be restricted to the exempt income earned by the assessee. Charging of Interest u/s 234B, 234C and 234D - HELD THAT:- The charging of interest is consequential and mandatory and the AO has no discretion in the matter. This proposition has been upheld by the Hon ble Apex Court in the case of Anjum H. Ghaswala [ 2001 (10) TMI 4 - SUPREME COURT] and I therefore uph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it and that the disallowance, if at all, cannot exceed the amount of exempt income earned by the assessee during the relevant previous year. The AO, however, was of the view that disallowances in terms of Rule 8D(2)(ii) and (iii) of the Rules were called for. Accordingly, the AO computed the disallowance under Rule 8D(2)(ii) and (iii) as under:- Assessment Year Disallowance u/R 8D(2)(ii) (Rs.) Disallowance u/R 8D(2)(iii) (Rs.) Total (Rs.) 2012-13 16,97,863/- 86,062/- 17,83,925/- 2013-14 19,41,869/- 87,041/- 20,28,910/- 2.2 Aggrieved by the orders of assessment for Assessment Years 2012-13 and 2013-14, the assessee preferred an appeal before the CIT(Appeals)-10. The CIT(Appeals) was of the view that disallowance u/s. 14A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest was paid thereon and therefore, the disallowance made by invoking the provisions of Rule 8D[2][ii] of the I.T.Rules was misplaced since the investment in shares was not out of borrowed funds and hence, the disallowance made to the extent of ₹ 16,97,863/- ought to have been deleted. 3.1 Without prejudice to the above, the Learned CIT[A] erred in considering the entire amount of interest and bank charges for the purpose of calculating the amount of disallowance U/S.14A of the Income Tax Act. The learned CIT[A] erred in not excluding the interest and bank charges paid by the appellant on non-fund based (facility where no money has been received by the Company) such as Letter of Credit drawn on the suppliers of raw material. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olcim India Pvt. Ltd., 272 CTR 282 (Del). These decisions were considered by the Mumbai Bench of the Tribunal in the case of Future Corporate Resources Ltd v. ACIT, ITA No.4658/Mum/2015 dated 26.07.2017 relating to AY 2011-12 and it was held by the Tribunal Mumbai Bench that disallowance u/s. 14A of the Act cannot exceed the exempt income. Following the aforesaid decisions, we hold that disallowance u/s. 14A of the Act in the present case should be restricted to the exempt income of ₹ 51,000/- earned by the assessee. We hold and direct accordingly. 6. Ground No. 5 - Charging of Interest u/s 234B, 234C and 234D of the Act 6.1 In this ground (supra), the assessee denies itself liable to be charged interest u/s 234B, 234C and 234D of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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